THE Supreme Court has overturned an order requiring the State pay €400,000 damages to two mussel fishing firms over a ban on fishing for mussel seed in Castlemaine Harbour, Co Kerry.

The decision was made by a five-judge court in a three-to-two majority ruling.

The judgments centred on how to address the State's liability for actions which detrimentally affect private individuals.

The High Court in 2013 awarded €125,000 damages to Cromane Seafoods Ltd and €275,000 to O'Sullivan McCarthy Mussel Development Ltd, related firms involved in mussel fishing since 1979.

The companies sued the Minister for Agriculture and Fisheries and the State arising from a 2008 Ministerial ban on fishing for mussel seed which involved closing Castlemaine Harbour for several months in 2008.

The companies complained the mussel seed season was over when they were let back into the harbour in 2008 and they suffered further losses when a similar situation arose in 2010.

Castlemaine Harbour (Cromane) has been a Special Protection Area (SPA) since 1979 in accordance with an EC Birds Directive while a wider area of protection, a Candidate Social Area of Conservation, was opened in 2000 under the Habitats Directive.

This meant the site amounted to a "Natura 2000 site" with the result the harbour closes each year for a period to allow for stock conservation. The Minister's authorisation was also required for obtaining mussel seed.

After the European Court of Justice ruled in 2007 Ireland had not correctly transposed the Habitats Directive, concerns arose in the relevant Departments about risk of adverse environmental impact on the Castlemaine Harbour SPA due to gathering of mussel seed.

That led to the 2008 decision not to open the mussel seed fishing activity normally expected in the summer months.

The fishery was not opened until October 5 by which time predators had eaten the mussels, leaving the companies with no mussel stock. A delay opening the harbour in 2010 left them in a similar position.

The High Court found operational negligence by the State in failing to carry out proper scientific investigations or monitoring between 2000 and 2008.

Those would have provided proper base line studies for the prompt carrying out of an appropriate assessment to permit timely reopening of the harbour for mussel seed collection, it held.

There was a breach of the companies' legitimate expectation the harbour would reopen annually for mussel seed collection because the Minister would operate a regime of granting aquaculture licences and manage the harbour appropriately, it also ruled.

By the time the European Commission indicated it was going to allow a certain amount of toleration for the harbour as a special case, the mussel predators had come and gone, the High Court also said.

The companies operated lawfully, were entitled to expect the regime would continue, and suffered loss and damage, the court concluded.

The majority court upheld the appeal in relation to legitimate expectation and operational negligence.

While Mr Justice Frank Clarke and Ms Justice Mary Laffoy agreed the State was entitled to win its appeal concerning findings of negligence and legitimate expectation where Cromane was concerned, they disagreed it had no liability for operational negligence concerning O'Sullivan McCarthy.

That company was entitled to damages arising from the 2008 harbour closure, they said.